Wednesday, 3 April 2013

Bicyle Tariffs in Canada going up - and why they shouldn't

Tariffs in theory can serve several purposes - protection of domestic industry, raising of revenue, and discouragement of a behaviour due to increased costs.

Canada is looking to raise tariffs on a wide variety of sporting goods, including bicycles, with carve outs for the political hot topic of hockey gear.  My first suggestion is that all bicycles now should be labelled as "offseason hockey training equipment", but there are more fundamental reasons why this is questionable policy.

If you agree with any of the below, or have issue with tariffs on sporting goods in general, please consider participating with the petition here.

Here's at least a few more reasons why increased tariffs don't make any sense:

Protection of a domestic industry.  Canada doesn't have any meaningful bicycle manufacture industry.  It's not like we're talking a nationally critical industry which could be argued for some strategic protection, or an employment concentrated regional industry that'd be a pain to have erased by offshoring.  Even Canadian brands manufacture abroad (Dorel/Cannondale, Rocky Mountain, Norco).  The manufacturing we do have is generally Quebec based, which is fine, but kind of raises the debate on regional wealth transfer through protectionism of specific industries.  But regionalism isn't what this is about.  Bicycles are, in the grand scheme of manufacturing, relatively simple to create.  They are well suited to offshore applications, and have been made offshore for years - that's a comparative economic advantage in simple manufacturing that isn't worth combating through policy.  This tariff increase isn't going to do more to foster a significant Canadian bicycle industry.

Raising of revenue.  It's quoted that these broad sweeping tariff changes will add $330mm to Canada's revenues.  First, let me remind us that a) the tax system is the most efficient, appropriate place to garner revenue for the country, which doesn't single out industries or subsectors, and b) any time spent by civil servants running numbers on incremental revenue from tariffs on bicycles is a complete waste of time, when we've been selling crude oil to the United States for decades on discount, continue to do so, and haven't achieved export capacity to other customers, which could be measured in the [call it $50 million per day according to this link] millions of dollars per day for decades should we be able to narrow the discounted pricing we recieve as a nation.  80/20 rule here on priorties... this is like deciding to spring clean your entire house one weekend, then starting in the corner of your living room with a Q-tip rubbing away some dust.  Senseless.  But let's pull back that digression to why we want more revenue - we have large governments in the modern age.  They attempt to do so many things for us that us simple citizens didn't really know we needed help with - and it has become comedic.  Let's look at trimming costs first rather than finding more revenue to fund bloat - gun registries, military purchases, and other projects of questionable excess expenditure could single handedly have multiples the impact that extra taxation on sporting goods could have.  The world I envision has government providing reasonably unobtrusive yet peaceful and organized living conditions for citizens, rather than prolific and deep reach into all aspects of the citizenry's life, business and being on a daily basis.

Discouragement of behaviour due to increased costs.  Tobacco is cheap to grow, dry, and roll into cigarettes.  Cigarettes are very expensive.  Why?  Because it's detrimental to society to have smokers who then become high probability of high cost health care patients for everyone to share treatment costs of.  High costs of cigarettes through taxation is disincentive.  Lets step back a second here - this is a broad tariff increase encompassing sporting goods?  So we want to curb sporting activities through raising their costs across the board?  What kind of country are we in?  Sports are healthy, generate camraderie and entertainment.  Bicycles in particular are inexpensive,  pollution free health machines.  Why retard the spread of such a wonderful invention?  Bikes should be a child's, a university student's, an athlete's viable form of casual transportation.  Do we not want this?  Canada, do you have any idea what the health care cost line item on your national budget would be annually if we could magically replace every 2 pack a day smoker with a set of fresh lungs and a person whom instead of smoking rode their bike to work daily?  This in itself would probably entirely solve our national budgeting quagmire.  Bicycles are low up front cost, virtually nil variable cost transportation machines - for students, urban dwellers, and athletes.  In the abstract, a road exposed to a million bicycles vs. a million cars would need monumentally less repair and upkeep, again shifting Canada's cost structure.  This will never happen in practicality, however as a nation, the points illustrate that each percentage increase in those who cycle in this country have postive aggregate benefits.

If all this fails to be heard, "hockey offseason training equipment" imports will be through the roof.  Bicycles offer excellent threshold interval training potential that will help anything from hokcey kids to pros to speedskaters to skiers further their excellence in their sports.

Want to turn the dirty word of "import" into "exports"?  Look at Canada's role in progressing mountain biking, where we export film media worldwide that is cutting edge in terms of what humans on bicycles (Kranked series anyone?) or unicycles (thanks to Chris Holm) can accomplish.


  1. “ .. we have large governments in the modern age. They attempt to do so many things for us that us simple citizens didn't really know we needed help with - and it has become comedic.”

    Exactly! Bakke for Premier of Alberta!

    Craig D.

  2. Great discussion! I justified my newest bike by comparing cost of the bike in Canada and abroad, and opted to buy local. I'm a healthier and happier person from riding and not being contained in a bacteria incubating aluminum tube. Sure, the gov't can raise tariffs, but when this ride needs replacing I'll think hard and long and again do comparisons online. I'll look for other ways to replace my trusty steed, maybe next time visiting the great US of A, bring it back over the border, claim it, reduce the price by $800, pay the duty and tariff, and thus not buy it from my favourite local bike shop. So, who will I have hurt? The local bike shop guys will lose out. These bike shops who are only now pricing bikes at near parity with the US of A (and other countries) and now not losing that sale and follow-on services and loyalties. I'll sign the petition and encourage everyone, including my 80 year old mum, to do so, too!

    Thanks, Premier (to be) Bakke!